Waste-to Energy Projects on the Maldives – Analysis of the Financial Feasibility Page 1

Andreas Bockermann

Waste-to-Energy Projects on the Maldives –Analysis of the Financial Feasibility

24th INFORUM Conference Osnabrück, 31.08.2016

Photos from Catchment Area 1: Upper North Region or Kulhudhufushi

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Contents

1. Introduction and background 2. General Aspects of a Feasibility Study3. Possible outputs from waste incineration4. Aspects of this Feasibility Study5. Project target: What variant is feasible?6. Financial Aspects of this Feasibility Study7. Financial Analysis - Model Overview8. Waste composition9. Results for Catchment area 110.Results for the three areas11.Challenges and open questions

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Introduction and backgroundRepublic of Maldives

Population: about 400 000 inhabitants

Amount of islands: 1196 thereof 199 inhabited

North-South Dimension: 800 kmEast-West Dimension: 130 km

Capital: Malé with ~150 000 inhabitants on 3 islands

on 5.8 km² (~ 2.4 km x 2.4 km)

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Catchment area 1 : Upper North Region

Introduction and background

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Introduction and backgroundName of the project: Preparing Outer Island Waste-to-Energy Projects - Preparation of the Accelerating Sustainable Private Investment in Renewable Energy Projects

Client: Ministry of Environment and Energy of the Republic of Maldives

Financier of study: World Bank

Financier of the proposed project: unknown, maybe World Bank

Carried out by Kocks Consult GmbHFinancial analysis carried out by Plejades GmbH Economics

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Economic

General Aspects of the Feasibility Study

Waste toEnergy

ISWM

Treatment

Logistics /Transport

RecyclingCollection

Regional aspects

Environ-mental

Technical Feasibi-

lity

Financial & com-mercial

Afforda-bility

Legal require-

mentPolicy & Strategy

Techno-logy

Central vs.

Decentral

Socialbeneftis

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ISWM = Integrated solidwaste management

Possible outputs from waste incineration

Incinerator (grate): heat recovery

Grate incinerator

Water desalination

Cold water production with ARP*

Electricity production

Electricity production & water desalination

*ARP = Adsorption Refrigeration Plant

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Analysed areas and optionsRegions / Catchment areas:• CA1: Upper North Province with site on Kulhudhuffushi• CA2: North Province with site on R.Vandhoo (uninhabited)• CA3: South Province with site on Addu City / Hithadhoo

Waste-to-energy variants:• Sea water withdrawal and desalination plant• Adsorption refrigeration plant & distribution• Electricity production (Steam boiler, steam engine)• Electricity production and thermal desalination

Additional necessary components for each option:• Collection and transport by trucks and vessels• Sanitary landfill

Aspects of this Feasibility Study

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Project target: What variant is feasible?

Variant 0 Variant 1 Variant 2 Variant 3 Variant 4

Incineration+ landfill Desalination ARP Electricity Electricity +

Desalination

Upper North Province

/ Kulhudhuffushi

North Province / R.Vandhoo

South Province / Addu City

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Main Questions:- Are the proposed investments sustainable?- Are the operators viable?- What are the “best” investments?- Tariffs?

Technical inputs:- Catchment area, related population, tourist resorts- Waste quantities per capita and waste compositions- General technologies esp. incineration technologies

Financial and technical parts:- Investments- O&M costs- Revenues

Prices: All calculations are made in prices of 2014, no price increases

Financial Aspects of this Feasibility Study

Page 11

Financial Analysis - Model Overview

Investments

Financing investments

(Grants, loans)

Annual Cash flow negative/positive

Target: Positive cumulated cash flow

In the last years of the forecast

Replace-ments

O&M costs

Waste management services

Tariffs

Revenues

Operational surplus / deficit

Financing operational subsidies

Waste amounts

Revenues from energy sales

Revenues from recyclables

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Assumed waste composition householdsWaste composition % Trend

Organics 70% constantGarden waste 30%Kitchen waste 30%other organics 10%Paper & cardboard 7% constantGlass 3% decrease by 1%

Plastics 5% increase in the next years probably by 2-3 %

Metals 4% constantHazardous wastes (including clinical) 2% constant

Other (inert & dust)/mixed waste 9% decrease

Total 100%

Waste per person: Between 0.8 kg and 1.0 kg per day and capita

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Assumed waste composition tourist resorts

Waste in tourist resorts: Between 3.0 kg per day and “bed”

Waste composition % Trend

Organics 74% constantGarden waste 19%Kitchen waste 45%other organics 10%Paper & cardboard 9% constantGlass 5% constantPlastics 5% constantMetals 2% constantHazardous wastes (including clinical) 0,5% constant

Other (inert & dust)/mixed waste 4,5% constant

Total 100%

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Results for Catchment Area 1: Upper North Region

0

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043

EL production

Landfill

Incinerator

Transport system

Island waste management centres

Bins

Investments: Initial investments and replacements in USDLife-time

2015

Collection and TransportBins

120 l bins 5 278 123240 l bins 5 0660 l bins 5 0

Subtotal, bins 278 123Island Waste Management Centres (IWMC)

IWMC construction 20 700 000Plastic shredders 10 42 054Wood Chipper 10 78 221Can crusher 10 201 860Glass crusher 10 63 081

Subtotal, Island Waste Management Centres 1 085 216Transport system

Vessels 60'' feet 10 1 000 000Subtotal, Transport system 1 000 000

Subtotal Collection and Transport 2 363 340Variant 3

IncineratorCivil works 20 60 000M&E equipment 12 4 050 000

Subtotal, incinerator 4 110 000Landfill

Civil works 20 620 000M&E equipment / wheel loader 12 200 000Vehicles and prefabricated buildings 0 0

Subtotal, landfill 820 000Electricity production / Steam boiler, steam engine

Civil works 20 50 000M&E equipment 12 2 700 000

Subtotal, Electricity production / Steam boiler, steam engine 2 750 000

Subtotal Variant 3 7 680 000Total investments and replacements 10 043 340

Total for the period from 2015 to 2044 19 491 050Residual value in 2044 -5 034 813Total minus residual value 14 456 237

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Bins; 0

Island waste management centres;

696 704

Transport system;307 344

Incinerator; 128 475

Landfill; 35 765

EL production; 345 145

Results for Catchment Area 1: Upper North RegionO&M costs // Operation and maintenance costs in USD

Total annual O&M costs: 1.5 million USD per yearfuel for transport: 0.2 million USD

O&M costsCollection and transportBins

Maintenance, bins 0Subtotal, bins 0Island Waste Management Centres (IWMC)

Maintenance, IWMC construction 14 000Maintenance, Plastic shredders 841Maintenance, Wood Chipper 1 564Maintenance, Can crusher 4 037Maintenance, Glass crusher 1 262Workers, unskilled 675 000

Subtotal, Island Waste Management Centres 696 704Transport system

Maintenance, Vessels 60'' feet 30 000Labour, captain 9 375Labour, workers 68 750Fuel 199 219

Subtotal, Transport system 307 344Subtotal Collection and Transport 1 004 048Incinerator

Civil works 600M&E equipment 81 000Workers, skilled 25 000Workers, unskilled 21 875

Subtotal, incinerator 128 475Landfill

Maintenance of civil works 6 200Maintenance of M&E equipment 4 000Maintenance of vehicles and buildings 0Fuel 25 565

Subtotal, landfill 35 765Electricity production / Steam boiler, steam engine

Maintenance of civil works 500Maintenance of M&E equipment 54 000Electricity 284 705Chemicals 5 940

Subtotal, Electricity production / Steam boiler, steam engine 345 145

Subtotal Variant 3 509 385Total operation and maintenance costs 1 513 433

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0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043

Tariffs

CDM / GHG emission reduction

Electricity sales

Metals

Plastics

Paper & cardboards

Results for Catchment Area 1: Upper North RegionRevenues in USD

Total O&M costs in 2025: 1.51 million USD Total revenues before tariffs in 2015 0.77 million USDRevenues from tariffs in 2015 2.06 million USD Operational surplus But still need for financing Initial investments and replacements

Revenues 2025Paper & cardboards 14 364Plastics 9 819Metals 32 004Electricity sales 566 160CDM / GHG emission reduction 136 091

Total revenues before tariffs 758 437Tariffs 2 060 681

Total revenues 2 819 118

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Results for Catchment Area 1: Upper North RegionTariffs and affordability

Tariff per capita (domestic): about 27 USD per year

Fees per “bed” in tourists resorts: about 270 USD per bed

Reason: • One “bed” produces three times more waste than a domestic person• People who can afford holidays on the Maldives have also the

affordability to pay about 1 USD per night for a waste management system in their holiday area

Affordability of the domestic population:Tariff of 27 USD per year is about 0.3% of the GDP per head affordable

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Results for Catchment Area 1: Upper North Region

• Cash flow statement can be calculated• Loan conditions: 3%, grace period 3 years, total 18 years• Annual interim financing for cash shortages allowed

-8 000 000

-6 000 000

-4 000 000

-2 000 000

0

2 000 000

4 000 000

6 000 000

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043

Cash surplus (+)/deficit (-) (beforeinterim financing)

Cumulative Cash Flow(including interimfinancing)

Cash Flow

Result:Proposed investment project is financially feasible

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Variant 0 Variant 1 Variant 2 Variant 3 Variant 4 Othervariant

Incineration+ landfill Desalination

Adsorption Refrigeration

PlantElectricity Electricity +

DesalinationOther

variant

CA1: Upper North Province

/ Kulhudhuffushi

financially feasible*

proposed / financially

feasible

CA2: North Province

/ R.Vandhoo

proposed / financially

feasible

CA3: South Province

/ Addu City

financially feasible

proposed

* if pipes system is financed by the customers

Results for the three catchment areas

CA3: Waste quantity is (currently) not sufficient for incineration better sorting and composting + rehabilitation of the existing landfill

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ChallengesModelling challenges• In the “engineering world” there exists population growth

• Minor changes of waste amounts and compositions

• Growing population has no impacts to O&M costs

Other challenges / points for discussion• Feasibility analysis of a steam-boot driven with waste as energy input

for the steam engine for waste collection from island to island

• Why no import taxes for packaging? Especially for very small countries this seems to be reasonable.

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Questions

Thank you for your attention!Any Questions?

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